cash deposit

[gflc123]

Hi all new to this forum. Going to look at a trawler in Florida and was told I must put a 10 percent CASH deposit with a signed contract before I get it surveyed. Is it customary to use CASH? I can understand a deposit but don't understand why CASH. Can anybody comment. Thanks

 

[sunchaser]

I've done checks, not cash. Broker held in office safe until deal wrapped up. % varies, there is no magic number but the higher the % the more serious the offer, generally.

 

[BandB]

Hi all new to this forum. Going to look at a trawler in Florida and was told I must put a 10 percent CASH deposit with a signed contract before I get it surveyed. Is it customary to use CASH? I can understand a deposit but don't understand why CASH. Can anybody comment. Thanks

Are you dealing with a broker? The standard in Florida is for the deposit to be paid to the selling broker's escrow account. I've personally never encountered a situation where a deposit by check wasn't accepted.

 

[RT Firefly]

Greetings,
Welcome aboard. Agree with above. Check should be acceptable and put in escrow account. IF cash is still demanded I'd question the shadiness of the seller and particularly the broker if the broker is the one making the demand. Be prepared to walk or run away. VERY few people work in cash anymore and there are hundreds of boats out there.

 

[BruceK]

Be on guard if required to pay in a way outside the norm.
Could be the seller only deals in cash, for some reason...
Does the broker really mean cash $,or a form which transfers $ in a simple direct way, including cheque/check?

 

[BandB]

Here is a link to the standard Florida agreement as designed by the Florida Yacht Brokers Association, Inc.

http://www.fyba.org/docs/memberdocs/fyba_purchase_sale_agreement.pdf

 

[hmason]

Never, never cash.

 

[menzies]

GET YOURSELF A BUYERS BROKER

He will go with you to view the boat and walk you through the whole process, guarding you from the nastiness that often comes with dealing with a certain type of broker. Plus HE will take you deposit check and put it into HIS escrow.

You pay nothing, he gets paid out of the sellers paid commission.

 

[rwidman]

The deposit is a way to weed out the tire kickers or people looking for a free boat ride. Requiring "real money" is a way to make sure that you are seriously in the market and in the market for the boat in question.
A check isn't "real money" until it is cashed and clears the bank.
What you need to do is be sure you will get your deposit back if the boat fails the survey or you don't like how it rides or handles. This should be in the contract.

 

[bayview]

no cash ad only in an escrow account. Boat US offers escrow serice.

 

[Aquafarm]

Check only! Broker should hold it in escrow while survey is conducted. At least that's how it worked in Annapolis MD.

 

[rwidman]

If I recall correctly, I had to make a wire transfer into the broker's escrow account.

The method of placing a deposit is negotiable, but if you and the seller or broker can't agree, this will be one boat that you won't be buying.

 

[stubones99]

Make sure they know the deposit is not 'earnest money' which is money they keep regardless of the outcome of the sale.

 

[BruceK]

If the cash, or the check, gets deposited to an appropriate account, the effect is the same. The problem arises if the cash is not going to be dealt with that way. How will it be dealt with, what does the Agreement say about the deposit?
With my present boat, the sellers broker never banked the deposit cheque, it was returned to me when I paid for the boat.

 

[BandB]

I can't imagine he's dealing with a broker. Florida brokers are licensed and do generally follow a standard protocol.

 

[gflc123]

I should be clear. Im going to see the boat monday and having it surveyed Wednesday so he is asking for cleared funds before we do anything and was told cash is very common for something like this

 

[BandB]

I should be clear. Im going to see the boat monday and having it surveyed Wednesday so he is asking for cleared funds before we do anything and was told cash is very common for something like this

Is it a broker? Or individual?

 

[dhays]

To be honest, I can't recall how I handled my boat purchase 6 years ago. I think I made a deposit at the time of the sea trial, haul out and survey. It most certainly wasn't in cash but likely was a cashiers check.

I never quite figured out the reason for the deposit. I paid much more for my flight down to California, the haul out, and the survey, than I paid in a deposit. It seems to me that if a potential buyer is already footing the bill for all that, that a deposit just to see if the buyer is serious is a bit of overkill. OTOH, a deposit paid into an escrow account with an agreement that it is simply a refundable deposit doesn't bother me.

 

[gflc123]

I'm dealing with a broker

 

[Britannia]

The problem with cash is that it's not traceable if things don't go well. If I were you, and they were demanding cash, I'd offer to show up with the cash at the broker's bank and pay it into the escrow account and get a receipt. I wouldn't just hand over the cash.

The three times I have done this, my deposit check was never even cashed.

Richard

 

[menzies]

Surprised you scheduled a survey before seeing the boat? Are you that confident?

Anyhow, the broker will not expect a deposit check until after you have seen the boat and want to make an initial offer. You should then give the broker the check with your signed offer. The offer will include a "subject to satisfactory survey" clause. If you are not satisfied with the survey you get ALL of your money back. If you had a buyers broker he would make sure that was all in order.

So read the offer contract very carefully to make sure you get it all back if you chose to walk away.

After the survey you get to negotiate the price again to cover for repairs. If the finding are so grave that you are no longer interested in the vessel you can walk and not negotiate and get your money back. If you decide to negotiate and the seller will not come down to where you want to be, you can walk then to. The broker or seller should not take one penny of your money unless you chose to go forward after survey. The offer contract will have dates in there by when you have to make a decision.

Here is a critical piece of information. IT IS A BUYERS MARKET. A big-time buyers market. The seller wants to sell his boat. So tell the broker that you will be bringing a check. Tell him you need to do that as documentation that you gave the deposit. Do not fall in love with the boat. Unlike a house, location is not a factor - you can move the boat. And unlike a house production boats are pretty much all alike - and there will be another one along shortly.

So again,. no check until you have seen the boat and are ready to make a signed offer.

 

[gflc123]

I told the broker I was surveying the next day and had told him originally I am a cash buyer (meaning i didn't need financing) He would not take deposit till the contract was signed. apparently it takes 2 business weeks for bank checks to clear and 3 weeks for personal checks to clear.

 

[menzies]

I told the broker I was surveying the next day and had told him originally I am a cash buyer (meaning i didn't need financing) He would not take deposit till the contract was signed. apparently it takes 2 business weeks for bank checks to clear and 3 weeks for personal checks to clear.

Where does he live - Timbucktu?

By the time you make the offer, survey, negotiate, do the title searched, and prepare the documentation, and collect the boat, he will have plenty of time to clear the check.

 

[meridian]

Are you saying you haven't seen the boat yet but already have a signed purchase agreement? I see you are a new member. What is your boating background? Have you purchased a boat previously?

 

[menzies]

Are you saying you haven't seen the boat yet but already have a signed purchase agreement? I see you are a new member. What is your boating background? Have you purchased a boat previously?

No, see post #22.

 

[meridian]

Messages are being posted fast and furious. Can't stay ahead of the pack

 

[gflc123]

thanks all for your help

 

[menzies]

gflc, the process is pretty much identical to buying a house.

Only people buying a house tend to have their own realtor, whereas most boat buyers don't think about doing that. If this boat does not work out consider getting a broker for the next one you look at. You will be amazed at how easy he will make your life.

 

[gflc123]

Hey meridian not sure where you got your info but if you look at my original post and read it carefully it might answer some of your questions.
As far as my boating background goes I'm positive it's not nearly as accomplished as yours, but we all have to start somewhere. Boat? I've owned a few, but i still get confused with port and starboard when i look to the back of the boat. Oh well i'm sure it will come with time. thanks again

 

[ksanders]

If you have any doubt at all just use a marine title and escrow company. Their fees are astonishingly low, and they are an impartial third party.